If the Stock Market Crashes, These Are the First 3 Dividend Stocks I Want to Buy

I'm not predicting another stock market crash anytime soon. However, I already know which dividend stocks I'll be looking to buy if it does. Coca-Cola (NYSE:KO), Procter & Gamble (NYSE:PG), and Waste Management (NYSE:WM) operate resilient businesses with impressive dividend-growth track records. The only thing holding me back from buying more shares today is their valuations.

Here is what I'd love to pay to boost my positions in these top dividend stocks.

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Coca-Cola: I'd love to buy this Dividend King below $80

Coca-Cola is one of the world's strongest consumer brands. It generates durable, steadily rising cash flow, driven by volume growth and its pricing power. Both were on full display during the third quarter. Coke's revenue grew 7%, driven by 5% growth in global unit case volume and continued price growth. That drove an 11% increase in its comparable earnings per share (EPS). The company's strong performance gave it the confidence to raise its full-year outlook. It's now targeting at least 11% comparable EPS growth.

The company's steady earnings growth has supported its rising dividend. Coca-Cola has increased its payment for 64 straight years. That easily qualifies it as a Dividend King, a company with 50 or more years of annual dividend increases.

I think Coca-Cola is a wonderful business. My issue is that it's a very expensive company. At its recent price of around $98 per share, Coke trades at nearly 30x earnings (and a 2.2% dividend yield). That's a premium compared to both the S&P 500 (22.4x) and Nasdaq-100 (27x).

I'd be much more interested in buying Coca-Cola if its share price dropped below $80. That would provide both a higher starting dividend yield (around 2.7%) and a more attractive valuation for long-term earnings growth (around 24x). At that level, Coke would be better positioned to deliver total returns closer to my long-term target of 10% annualized.

Procter & Gamble: An opportunity to buy everyday essentials at a discount

P&G owns a portfolio of essential consumer brands that people continue purchasing even when economic conditions weaken. Its scale, pricing power, and productivity initiatives support earnings and dividend growth. Like Coca-Cola, it's a Dividend King (70 years of annual increases).

The consumer household products giant isn't performing quite as well as Coke these days. While its net sales rose 4% in its fiscal 2027 first quarter, core EPS only increased 1%. The company expects only 1.5% core EPS growth at the midpoint this year, due to an 11% drag from commodity cost headwinds and other items.

At its recent share price of around $170, P&G trades at about 24x earnings. While that's not overly expensive for a premium consumer-products company, it's more than I want to pay given its current headwinds. I'd love another opportunity to buy P&G around $145, where its resilient business, growing dividend, and potential for steady earnings growth could combine to deliver more attractive long-term returns.

Waste Management: I'd jump at the chance to buy more near $200

WM provides an essential service that households and businesses need regardless of the economy. Its collection routes, disposal facilities, and landfill network provide durable competitive advantages and pricing power. The company estimates that about 75% of its revenue has annuity-like characteristics. That's the type of durable business I want to own long term.

The waste management company is delivering solid results these days; revenue was up 6.3% in the third quarter, driven by rising prices and volumes. Meanwhile, it's generating robust cash flows ($4.9 billion through the first nine months of this year, up 12% from the prior year). That's allowing it to invest in growing its business through sustainability investments and acquisitions, while also returning cash to investors through repurchases and dividends. WM has increased its dividend for 23 straight years.

The leading North American waste and recycling company currently trades at a premium valuation. At its recent price of around $245 per share, it trades at around 28x earnings and yields roughly 1.6%. I'd love to buy more shares if WM fell to $200. That would put its dividend yield closer to 2% and put the company in a better position to deliver double-digit annualized total returns.

Waiting for better prices

Coca-Cola, Procter & Gamble, and Waste Management have the characteristics I seek in long-term dividend investments: durable businesses, strong cash flow, and long histories of increasing their payouts. However, even great companies aren't necessarily great investments at any price. I'd love to buy more shares of these three stocks, but I'm waiting for better valuations. A stock market crash could provide exactly the opportunity I'm looking for. While I'm not hoping for a crash, I plan to capitalize on one if it occurs.

Matt DiLallo has positions in Coca-Cola, Procter & Gamble, and WM. The Motley Fool recommends WM. The Motley Fool has a disclosure policy.